DECEMBER 2016 BAD FAITH CASES: REVERSE BAD FAITH RELIEF AND STATUTORY INSURANCE FRAUD GRANTED ON SUMMARY JUDGMENT (Philadelphia Federal)

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In this case, the record was uncontroverted that the insured stated in the application to his homeowner’s carrier that he did not use alternative heat sources. However, he later admitted to using kerosene heaters. The house burned down, and he made claims for coverage, which were denied. He brought suit for breach of contract.

The carrier counterclaims for breach of the duty of good faith and fair dealing, and insurance fraud under 18 Pa.C.S. § 4117. The Court granted summary judgment to the insurer on both the breach of the contractual duty of good faith and statutory insurance fraud based upon the uncontroverted evidence. It rejected an 11th hour argument that the insured was illiterate, based upon the record showing he was capable of reading.

Date of Decision: November 22, 2016

Payne v. Allstate Ins. Co., No. 11-2546, 2016 U.S. Dist. LEXIS 162376 (E.D. Pa. Nov. 22, 2016) (Schiller, J.)

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